You have an invoice that your counterparty has never paid — and time is running out? See what you can do about a time-barred debt, learn what the statute of limitations is, and how to effectively recover your money — even if you cannot take it to court anymore.
This article explains in plain language what your options are when recovering money from a time-barred invoice and what tools you can use.
The statute of limitations explained in plain language
Have you got an invoice that has been sitting in a drawer for ages because the counterparty "forgot" to pay? If months — or even years — have passed, the key question becomes: "Is there anything I can still do?"
The answer is YES — with a small "but".
What is the statute of limitations, really?
The statute of limitations is simply "a time limit for pursuing your money in court". Once that period elapses, your debtor still ought to pay — but if the case reaches court, they can say: "I will not pay because the claim is time-barred."
And in such a case the court will accept the debtor's position and dismiss your claim — even if you have the invoice, the contract, and emails confirming acceptance of the invoice, all in black and white.
When does my invoice become time-barred?
Under Polish law, invoices between businesses are generally subject to a 3-year limitation period. But beware — in some contract types the period can be shorter, even one year:
- sales contract — 2 years;
- transport contract — 1 year.
An amicable approach? Absolutely.
Limitation does not mean you have to wave it off and give up the money you are owed. You can still act amicably:
- send a reminder about the debt;
- send a demand for payment, including via a debt-recovery firm;
- propose a settlement.
Debtors often only pay when they see that someone has actually taken hold of the case and that "the games are over".
How do you persuade a debtor to pay? The BIG register as a legal tool after the limitation period
You cannot take a time-barred debt to court, but you can do something that really moves the needle for your debtor — you can enter them into the BIG debtor register, for example BIG InfoMonitor.
What does such an entry mean for the debtor?
- restricted access to financing (loans, leasing, instalment plans);
- loss of business credibility and impact on their relationships with counterparties (the debt becomes visible to anyone running credibility checks).
Many debtors react instantly — after all, nobody wants to be on a "blacklist", potentially for up to 10 years.
What you should know
- After limitation you cannot sue the debtor, but you can remind them about the debt in order to obtain payment outside of court and bailiff proceedings;
- A BIG entry is a legal and effective form of pressure;
- It is better to act earlier — before the debt becomes time-barred (see our article on an overdue invoice and 7 debt collection mistakes);
- You don't have to act alone and you don't have to sign your own contract with BIG. A fast, low-cost and simple online solution does exist — see Recover Debt Online.
Time works in the debtor's favour — that's why the faster you act, the bigger the chance the money returns where it belongs: to your pocket.
Useful provisions and case law
- Art. 117–125 of the Polish Civil Code — limitation of claims
- Polish Act on Provision of Economic Information and Exchange of Economic Data (Journal of Laws 2010 No. 81, item 530)
- Judgment of the Court of Appeal in Warsaw of 23 July 2020, case no. VII AGa 1871/18 — the court ruled that the question of disclosing information about a time-barred obligation is to be answered in the affirmative. The legislator has not granted the unreliable counterparty any right that would prevent the transfer of information about monetary obligations relating to overdue obligations, including those that have become time-barred. The generally accepted principle should be the repayment of debts, not the protection of the interests of persons who fail to meet their monetary obligations on time. (source)